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12.30.11

Cablegate: Microsoft Rushes Vietnam to Get Rid of Open Source, Including FOSS Policy

Posted in America, Asia, Cablegate, Free/Libre Software at 8:15 pm by Dr. Roy Schestowitz

Cablegate

Summary: A good look at how Microsoft crushes freedom-respecting software in Vietnam

AS ALWAYS EXPECTED, the monopolist from Redmond will never permit competition to exist. Like a tyrant running after potential opposition, Microsoft runs after any signs of Free/open source software adoption and sends its proxies for annihilation, confusion, entryism, or whatever. Cablegate provides some more insight and examples of what Microsoft is doing. The following cable, for instance, gives yet more details on how Microsoft asks US government officials to help derail Vietnam's migration to GNU/Linux.

In ¶6 of the first cable it says: “Software industry members estimate that nearly 90 percent of software in Vietnam is pirated. Several events in 2007 indicate that this situation could improve in the near future, however. Following the Prime Minister’s July 2006 Decision 169 requiring government agencies to strictly comply with copyright laws, a February 2007 Prime Minister’s Instruction laid out the functions, tasks and budgetary means to meet this goal. In May 2007, the GVN signed a landmark software copyright agreement with Microsoft, under which Vietnam will purchase an estimated 300,000 licensed copies of Microsoft Office for government workers, provincial officials and many university faculty and staff (reftel E). In a recent meeting, Microsoft officials informed the Embassy that they are pleased with the GVN’s compliance with this agreement, although “implementation could be faster.” Reportedly in an attempt to avoid copyright infringements, the Communist Party of Vietnam announced in October 2007 that it would switch its 20,000 computers nationwide to open source software. In December 2007 the Ministry of Information and Communication (MIC) issued a list of open-source software products that it recommended other GVN agencies use to avoid copyright violations.”

It is also reassuring to see that “[t]he Government of Vietnam issued the following IPR-related regulations in 2007: . . . — Decision 08/2007/QD-BTTTT, dated 24 December 2007, on the List of open source Software That Meets the Requirements for Usage by State Agencies and Organizations;”

Here is some more lobbying: “Representatives of U.S. IT companies met with Bisbee and Mikalis to voice their concerns about an IT procurement policy announced by Vietnam in late July 2006 (Decision 169). USTR and Embassy Hanoi have worked closely with the Ministry of Post and Telecommunication (MPT) since July to raise USG and industry concerns about the policy, which seeks to provide procurement preferences for localized IT products and open source software. MPT released a draft implementing circular on January 30 for industry comments, and USTR urged the IT industry members to raise their concerns directly with MPT. In response to concerns raised by the USG in July, the MPT has worked to revise the original Decision to limit coverage to only government agencies and explicitly exclude state owned enterprises. USTR and Hanoi Econoff explained to the industry representatives that MPT was open to hearing from industry about global procurement best practices, and industry was urged to engage the GVN directly on this issue. (Note: In meetings in Hanoi, USTR raised industry concerns with MPT directly.”

The those who want to see it in context, here is the first cable:


VZCZCXRO2279
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0194/01 0510949
ZNR UUUUU ZZH
O 200949Z FEB 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7201
INFO RUEHBK/AMEMBASSY BANGKOK PRIORITY 6191
RUEHHM/AMCONSUL HO CHI MINH 4317
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 08 HANOI 000194 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EEB/TPP/IPE JBOGER 
STATE ALSO PASS USTR JCHOE-GROVES, DBISBEE AND RBAE 
STATE ALSO PASS USPTO FOR JURBAN 
STATE ALSO PASS LIBRARY OF CONGRESS FOR TEPP 
AMEMBASSY BANGKOK FOR USPTO JNESS 
USDA FOR FAS/FAA/AO HUETE 
USDOC FOR ITA/MAC/OIPR CPETERS AND 4430/MAC/AP/OPB/VLC/HPPHO 
 
E.O. 12958: N/A 
TAGS: KIPR [Intellectual Property Rights], ECON [Economic Conditions], ETRD [Foreign Trade], VM [Vietnam] 
SUBJECT: VIETNAM SHOULD REMAIN ON THE 2008 SPECIAL 301 WATCH LIST 
 
REF: (A) STATE 009475; (B) 07 HANOI 308; (C) 07 HANOI 309; (D) HANOI 
090; (E) 07 HANOI 945; (F) 07 HANOI 1752 
 
HANOI 00000194  001.2 OF 008 
 
 
(U) SENSITIVE BUT UNCLASSIFIED, DO NOT POST ON THE INTERNET 
 
¶1. (SBU) Summary:  Mission Vietnam recommends continued placement of 
Vietnam on the Office of the U.S. Trade Representative's (USTR) 
Special 301 Watch List for 2008.  One year after acceding to the 
World Trade Organization, Vietnam has continued efforts to put in 
place an effective legal regime to protect intellectual property 
rights (IPR), taken some positive steps to reduce IPR violations and 
worked to raise awareness of this issue.  Despite these efforts, 
however, enforcement remains weak, piracy and counterfeiting 
rampant, and several key obligations unfilled -- most notably the 
failure to provide criminal remedies for commercial scale copyright 
and trademark violations.  With additional time to improve its human 
resource capacity, joined by strong incentives such as Vietnam's 
expressed goal of participating in the Generalized System of 
Preferences (GSP) program and desire to continue to attract record 
levels of foreign direct investment, Vietnam should improve its 
enforcement record.  In the meantime, Vietnam should remain on the 
Special 301 "Watch List".  End Summary. 
 
IPR Situation in Vietnam - Achievements and Challenges 
--------------------------- -------------------------- 
 
¶2. (U) Vietnam's rapid economic development and integration into the 
world economy continued in 2007, highlighted by its January 11, 2007 
accession to the World Trade Organization (WTO).  The Government of 
Vietnam (GVN) also took noticeable strides in 2007 to provide 
adequate and effective protection for intellectual property rights 
and provide market access to U.S. persons who rely on IP protection. 
 Since the Mission's 2007 Special 301 submission (reftels B and C), 
Vietnam has: (1) continued to strengthen its IPR legal regime; (2) 
largely met its commitment to implement the Trade Related Aspects of 
Intellectual Property Rights (TRIPS) agreement upon its January 2007 
WTO accession; (3) modestly improved IPR enforcement and 
coordination of enforcement efforts; (4)signed a landmark agreement 
for GVN agencies to use only licensed software; (5) stopped the 
broadcast of unlicensed content by VTC, the state-owned digital 
terrestrial cable company; (6) stepped up training, public awareness 
and capacity building efforts for GVN officials and the general 
public; (7) joined the Rome Convention for the Protection of 
Performers, Producers of Phonograms and Broadcasting Organizations; 
and (8) enhanced IPR cooperation with the United States and other 
international donors. 
 
¶3. (SBU) Despite this recent progress, many of the problems 
identified in the 2007 Special 301 Review persist.  The Mission has 
reviewed industry and public comments submitted as part of the 2008 
Special 301 review process, and finds that they portray a broadly 
accurate picture of Vietnam's IPR situation.  Enforcement in Vietnam 
remains weak, inconsistent and unreliable, while IPR violations are 
rampant.  Piracy and counterfeiting are of particular concern, with 
industry estimates placing music, software and book piracy rates 
around 90 percent.  Anecdotal evidence supports these estimates. 
Market access barriers, including censorship of "cultural products," 
continue to limit the availability of legitimate products, further 
complicating efforts to combat piracy.  Although the GVN conducted a 
commendable public outreach campaign in 2007, including public 
television programs focused on IPR issues, awareness remains low. 
From the police to the courts, officials in Vietnam's enforcement 
system, especially at the local level, are poorly informed about the 
rights of IPR holders or how to prosecute, adjudicate and enforce 
those rights.  With additional resources and more time to implement 
its relatively new legislative framework, we expect that Vietnam 
will develop a more consistent track record of IPR enforcement.  In 
the meantime, we do not recommend a change in Vietnam's "Watch List" 
status. 
 
Optical Media and Book Piracy 
----------------------------- 
 
¶4. (U) Despite improvements in Vietnam's legal regime and a growing 
understanding of optical media and book piracy among enforcement 
agents, the GVN has made little progress at reducing the amount of 
counterfeit and pirated goods available in Vietnam.  Hanoi, Ho Chi 
 
HANOI 00000194  002.2 OF 008 
 
 
Minh City and most other major cities in Vietnam are rife with music 
CD, VCD, DVD and video shops.  Virtually 100 percent of U.S. and 
foreign products (and most domestic products) for sale or for rent 
are pirated.  Where legitimate media products and books are 
available, they are typically up to five times more expensive than 
pirated versions.  While most pirated goods are still manufactured 
in other countries, locally-produced pirated CDs, VCDs and DVDs are 
becoming more prevalent, and present a growing problem. 
 
¶5. (U) The Ministry of Culture, Sport and Tourism's (MOCST) 
Copyright Office of Vietnam (COV) has commenced drafting new 
legislation on optical disks.  In 2007, COV officials attended a 
seminar organized by IFPI and USAID's Support for Trade AcceleRation 
(STAR) program to review model optical disk laws and best practices 
adopted by other countries.  COV reports that it continues to 
discuss this regulation with other GVN agencies, and hopes to submit 
a draft for government approval in 2008. 
 
Software Piracy 
--------------- 
 
¶6. (SBU) Software industry members estimate that nearly 90 percent 
of software in Vietnam is pirated.  Several events in 2007 indicate 
that this situation could improve in the near future, however. 
Following the Prime Minister's July 2006 Decision 169 requiring 
government agencies to strictly comply with copyright laws, a 
February 2007 Prime Minister's Instruction laid out the functions, 
tasks and budgetary means to meet this goal.  In May 2007, the GVN 
signed a landmark software copyright agreement with Microsoft, under 
which Vietnam will purchase an estimated 300,000 licensed copies of 
Microsoft Office for government workers, provincial officials and 
many university faculty and staff (reftel E).  In a recent meeting, 
Microsoft officials informed the Embassy that they are pleased with 
the GVN's compliance with this agreement, although "implementation 
could be faster."  Reportedly in an attempt to avoid copyright 
infringements, the Communist Party of Vietnam announced in October 
2007 that it would switch its 20,000 computers nationwide to open 
source software.  In December 2007 the Ministry of Information and 
Communication (MIC) issued a list of open-source software products 
that it recommended other GVN agencies use to avoid copyright 
violations. 
 
¶7. (SBU) American software companies report growing cooperation with 
enforcement authorities to reduce the incidence of software piracy. 
In 2007, for example, Microsoft cooperated with the Economic Police 
to conduct five end-user raids (up from only two in 2006), three of 
which were Vietnamese-owned firms.  Microsoft credits this growing 
cooperation to its capacity-building work with MOCST Inspectorate 
and Economic Police staff.  Software companies continue, however, to 
bemoan enforcement authorities' lack of resources and the low level 
of fines, which do not serve as an effective deterrent.  Microsoft 
reported that several penalties from the 2007 end-user raids are 
still pending, but the infringers from these five cases have only 
been forced to pay USD 15,000 in compensation, "a fraction" of the 
value of the infringed software. 
 
Signal Piracy 
------------- 
 
¶8. (SBU) In a significant sign of Vietnam's growing will to meet 
international IPR commitments, continued industry and USG engagement 
finally convinced the state-owned digital terrestrial provider 
Vietnam Multimedia Company (VTC), formerly known as the Vietnam 
Television Technology Investment and Development Corporation, to 
cease its unauthorized re-broadcast of U.S.-owned content in 
September 2007 (reftel F).  Consequently, industry members estimate 
that losses to rights holders due to signal piracy in Vietnam 
reduced from $38 million in 2006 to $10 million in 2007.  Despite 
VTC's shift to a more legitimate business model, copyright 
violations continue in Vietnam's television industry.  Smaller 
provincial cable operators are the most common violators.  The 
Mission continues to hear occasional complaints of national cable 
operators airing DVDs and U.S. movies without authorization. 
 
Data Protection 
--------------- 
 
 
HANOI 00000194  003.2 OF 008 
 
 
¶9. (U) In compliance with its U.S.-Vietnam Bilateral Trade Agreement 
(BTA) and WTO TRIPS commitments, Vietnam included a provision 
(Article 128) in its 2005 Intellectual Property Law and the Ministry 
of Health issued a 2006 Regulation on Data Protection Applied to 
Drug Registration Dossiers, providing data protection and 
non-reliance.  To date, Post is not aware of any cases of U.S. firms 
attempting to avail themselves of data exclusivity as provided in 
these regulations.  We understand that industry members are working 
to engage and build capacity for GVN officials on how other 
countries approach this topic. 
 
WTO and BTA Compliance - Lack of Criminal Remedies 
------------------------ ------------------------- 
 
¶10. (U) Chapter Two of the BTA, which entered into force on December 
10, 2001, codified Vietnam's commitment to bring its IPR legal 
regime and enforcement practices up to international standards, to 
protect intellectual property consistent with WTO TRIPS standards, 
and in some cases, to provide protection stronger than TRIPS.  The 
BTA covers the fields of copyright and related rights, encrypted 
satellite signals, trademarks (including well-known marks), patents, 
layout designs of integrated circuits, trade secrets, industrial 
designs and plant varieties.  Vietnam also agreed to implement the 
WTO TRIPS agreement immediately upon its January 2007 WTO accession. 
 
 
¶11. (SBU) In recent years, Vietnam has undertaken significant 
efforts to promulgate a legal framework to provide for adequate and 
effective protection of IP rights.  As reported in recent years' 
Special 301 submissions, the 2005 Intellectual Property Law, its 
implementing decrees and circulars, as well as a number of other 
related laws and guidance have largely brought Vietnam's legal 
system into compliance with its BTA and TRIPS obligations.  Some 
legal documents, however, remain outstanding or are not yet 
adequately detailed to implement in practice.  Most notably, Vietnam 
has not yet issued provisions for criminal remedies for willful 
trademark counterfeiting or infringement of copyrights or related 
rights on a commercial scale.  Vietnam agreed to issue this circular 
by the time of its WTO accession as a stop-gap measure until it can 
complete required revisions to make its Criminal Code consistent 
with the new IP Law and Vietnam's BTA and TRIPS commitments. 
Despite continued U.S. engagement with the GVN, this commitment 
remains unfulfilled.  While Vietnam reports that it will begin to 
revise its Criminal Code in 2008, Post and USTR continue to press 
urgently for the GVN to meet its commitment on this important 
circular. 
 
IPR-Related Legislative Reforms in 2007 
--------------------------------------- 
 
¶12. (U) The Government of Vietnam issued the following IPR-related 
regulations in 2007: 
 
-- Instruction 04/2007/CT-TTg, dated 22 February 2007, on 
strengthening copyright protection for software.  The Prime Minister 
required government officials and agencies to provide adequate 
protection of software copyrights and to gradually cease the use of 
illegitimate software; 
-- Decision 51/2007/QD, dated 12 April 2007, on the Development Plan 
for Vietnam's Software Industry, 2007-2010; 
-- Decision 08/2007/QD-BTTTT, dated 24 December 2007, on the List of 
Open Source Software That Meets the Requirements for Usage by State 
Agencies and Organizations; 
-- Circular 01/2007/TT-BKHCN, dated 14 February 2007, guiding the 
implementation of Decree 103/2006/ND-CP detailing the procedures for 
registering rights of intellectual property; 
-- Decree 172/2007/ND-CP, dated 28 November 2007, concerning the 
revision and supplementing some Articles of Decree 57/2005/ND-CP on 
Administrative Penalties for the Violations in the Field of Plant 
Varieties; 
-- Decision 56/2007/QD-BNN, dated 12 June 2007, from MARD 
supplementing the list of protected plant species; 
-- Decision 103/2007/QD-BNN, dated 24 December 2007, from MARD 
supplementing the list of protected plant species 
-- Decision 3957/QD-BNN-TT, dated 13 December 2007, on use of 
guidelines to conduct tests for Distinctness, Uniformity and 
Stability of Plant Varieties. 
 
HANOI 00000194  004.2 OF 008 
 
 
 
Legal Updates Expected in 2008 
------------------------------ 
 
¶13. (U) Relevant GVN agencies continue to draft circulars and 
implementing documents for Vietnam's IPR Legal framework.  These 
agencies report the following expected updates in 2008: 
 
-- A Government Decree on Administrative Remedies for copyright and 
related rights infringement; 
-- A joint circular drafted by the Supreme People's Court, Supreme 
People's Procuracy, Ministry of Justice and Ministry of Public 
Security guiding the criminal prosecution for IPR infringement under 
the Criminal Code (see para. 11); 
-- A joint circular drafted by the Supreme People's Court, Supreme 
People's Procuracy and other concerned agencies guiding civil 
prosecution for IPR infringement; 
-- A COV Decree on Management of Optical Disks; 
-- A circular issued by MOST concerning administrative remedies for 
industrial property infringement; 
--  A joint circular drafted by MOCST, MOST, MOF and the Ministry of 
Planning and Investment concerning financial support for the 
purchase of legitimate software as well as guiding the collection 
and distribution of royalties; 
-- A circular issued by MOST guiding the issuance and revocation of 
certificates for examiners and qualified industrial property 
assessment organizations. 
 
¶14. (U) Agencies also report the following expected amendments and 
revisions in 2008: 
 
-- Revision of the Criminal Code; 
-- Revision of Article 8.2 of Decree 154/2005/ND-CP detailing some 
provisions of the Customs Law concerning customs procedures, customs 
investigations and supervision which require applicants to specify 
trademarks of declared goods; 
-- Amendment of Decree 106/2006/ND-CP on administrative remedies for 
IP infringement (The amendment reportedly will note that for 
Customs-related issues, the General Department of Customs' 
Department of Anti-Smuggling will have responsibility for applying 
remedies); 
-- Amendment of the IP Law assigning ex-officio powers to Customs 
officials in the enforcement of intellectual property rights; 
-- Revision of Article 214.3.b of the IP Law concerning 
allowance/disallowance of re-export of IPR infringing goods; 
 
International Agreements 
------------------------ 
 
¶15. (SBU) As reported in reftels B and C, in 2006 Vietnam fulfilled 
its BTA obligation to join five key international IP conventions. 
After completing procedures to join the Rome Convention for the 
Protection of Performers, Producers of Phonograms and Broadcasting 
Organizations in 2006, Vietnam officially joined the Convention on 
March 1, 2007.  National Office of Intellectual Property (NOIP) 
contacts report that the GVN is working on procedures to accede to 
the Hague Agreement Concerning the International Registration of 
Industrial Designs.  COV also claims that it hopes to join the 1996 
WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms 
Treaty (WPPT) once it has met all requirements for these agreements, 
but no specific target date has been set. 
 
Growing Coordination on IPR Enforcement... 
------------------------------------------ 
 
¶16. (U) As outlined in reftels B and C, in 2006 six GVN Ministries - 
MOCST (then the Ministry of Culture and Information), the Ministry 
of Science and Technology (MOST), the Ministry of Agriculture and 
Rural Development (MARD), the Ministry of Finance (MOF), the 
Ministry of Industry and Trade (MOIT), the Ministry of Public 
Security (MPS) and the Ministry of Information and Communications 
(MIC) - jointly signed a "Plan of Action on Cooperation in 
Preventing and Fighting against IPR Violations during the period of 
2006-2010," commonly referred to as Program 168.  The program has 
helped to address one of Vietnam's glaring shortfalls - poor 
coordination among the country's varied enforcement agencies - by 
codifying information sharing, enforcement cooperation and joint 
 
HANOI 00000194  005.2 OF 008 
 
 
training.  Agencies in Ho Chi Minh City report they are using 
Program 168 to facilitate inter-agency cooperation at the city 
level.  There are also signs of growing enforcement coordination at 
the provincial level, including in the infringement-rich China 
border province of Lang Son (reftel D). 
 
... But Enforcement Mechanisms Remain Weak 
------------------------------------------ 
 
¶17. (SBU) Vietnam's IPR enforcement structure, however, remains 
overly complicated and bureaucratic, with no less than seven 
ministries involved.  Multiple agencies are tasked with overlapping 
functions, but there are also gaps in coverage.  Institutional 
experience on IPR enforcement is extremely limited across the board, 
and local law enforcement personnel in particular remain uninformed 
on Vietnam's IP laws and procedures.  Government agencies rely 
heavily on administrative enforcement of IPR laws and typically only 
issue administrative findings or warnings either by letter or orally 
to small retailers of pirated material.  Very few cases have been 
referred for civil or criminal prosecution.  Some rights holders 
have told the Embassy that they often pursue only administrative 
remedies due to the uncertainty over the outcome of civil or 
criminal proceedings, given the lack of experience with IP issues 
among Vietnam's judges and prosecutors. 
 
¶18. (SBU) Under the new IPR regulations, to provide impartiality, 
experts at NOIP, MOST and the provincial Departments of Science and 
Technology (DOST) no longer have the lead in assisting enforcement 
agencies to assess trademark and other infringements (although in 
practice they are still consulted regularly).  Instead, Vietnam 
created in 2007 an Intellectual Property Research Institute, which 
among other tasks, is to provide expert consultations and 
independent assessments on suspected infringement cases.  The 
Institute is headed by former NOIP Director General Dr. Pham Dinh 
Chuong, but it is unclear who will comprise the rest of the staff of 
experts.  The creation of this new body of expertise will likely 
delay dispute resolution.  Since its creation in May 2007, The IP 
Research Institute has not yet provided any independent assessments. 
 The Director of the HCMC Market Management 
Bureau described the curtailment of technical advice from HCMC DOST 
as the primary reason fewer violations were processed in HCMC in 
2007 than in 2006. 
 
Enforcement Efforts in 2007 
--------------------------- 
 
¶19. (U) MOCST:  According to GVN data, MOCST officials fined 4,952 
businesses for infringing upon IP rights in 2007. Of that total, 
cultural inspectors issued warnings to 267 business (down from 519 
businesses in 2006), suspended the operations of 148 businesses 
(down from 289 in 2006), and revoked the business licenses of 43 
businesses (down from 169 in 2006).  Additionally, MOCST officials 
suspended two websites, ordered companies to cease broadcasting 
three movies due to copyright infringement and revoked three 
copyright certificates in the field of applied arts.  MOCST also 
confiscated more than 3.8 million pirated tapes and disks, 1.8 tons 
of semi-final pirated books, 28 VCD and DVD readers and 13 computers 
used to burn illicit disks.  MOCST inspectors collected fines of 
12.3 billion VND (USD 766,000) in 2007 (approximately equal to 2006 
totals), and forwarded one case for criminal prosecution. 
 
¶20. (U) MOST/NOIP:  In 2007, MOST reported it investigated 600 
businesses, settled 136 industrial design infringement cases, 606 
trademark infringement cases, 16 patent infringement cases and three 
geographical indication infringement cases and imposed fines 
totaling VND 2 billion (USD 125,000), up from VND 170.2 million (USD 
10,640) in 2006.  NOIP also provided expert consultation for 
enforcement bodies, local and overseas organizations and individuals 
when requested. 
 
¶21. (U) Market Management Bureau (MMB):  According to the MMB, in 
2007 the agency handled a total of 2,423 cases (over 10 percent more 
than 2006), of which there were 256 industrial design violations, 
2,156 trademark infringements, three commercial name violations, two 
patent infringement cases and six unfair competition cases.  MMB 
imposed fines totaling VND 3.514 billion (USD 220,000), 20 percent 
below 2006 totals. 
 
HANOI 00000194  006.2 OF 008 
 
 
 
¶22. (SBU) Customs: In 2007, Customs received 27 requests to monitor 
potential IPR infringing goods at Vietnam's borders, including from 
companies such as Honda, Nokia, Gucci, Nike, Chanel, Louis Vuitton 
and Wilson.  (Note: Customs officials have claimed they can only 
take action against products where the rights-holder has filed a 
monitoring request.  End Note.)  Customs confiscated infringing 
goods in 13 cases with fines totaling VND 970 million (USD 60,625). 
Confiscated goods included cell phone batteries, cell phone 
chargers, cell phone headsets, laptops, calculators, USB drives, and 
computer parts.  Customs provided the following examples: 
 
-- Haiphong Customs confiscated counterfeit CASIO and NOKIA cell 
phone batteries, chargers, headsets and calculators in a shipment 
from Hong Kong. The total value of the infringing goods is VND 10 
million (USD 625). Officials destroyed the goods and applied 
administrative remedies. 
 
-- Quang Ninh Customs confiscated goods from a customs-bonded 
warehouse including 2,109 KG of cell phone batteries, chargers, 
headsets and calculators.  Authorities destroyed the goods and 
applied administrative remedies. 
 
-- Ho Chi Minh City: Customs confiscated 98 motorbikes that 
infringed the industrial design of SAPPHIRE motorbikes with the 
total value of USD 47,481. 
 
¶23. (U) Courts: According to data provided by NOIP, the court system 
settled 15 of 16 civil IPR-related cases it received (14 cases 
concerned disputes over copyrights, one related to contractual use 
of artistic works and one related to technology transfer).  The 
courts also settled eight of ten criminal cases with six offenders 
sentenced to less than three years prison time and two sentenced to 
three-to- seven years in prison. 
 
¶24. (U) The Economic Police: MPS reports receiving 128 IPR 
infringement cases (down from 156 last year), including: 18 
trademark counterfeiting cases, 67 cases of geographical indication 
infringement, 11 trade name infringement related cases, five 
industrial design related cases and 27 unfair competition cases. 
The Economic Police have settled 86 of these cases.  Confiscated 
goods include 9000 bottles of wine, 10 tons of cosmetics and 3790 
bottles of perfume. 
 
¶25. (U) MIC: MIC settled 1 case related to copyright infringement 
over the broadcast of SEAGAME soccer matches, warned three press 
organizations for not referencing copyrighted source material, cited 
35 press organizations for the unauthorized use of copyrighted 
information, and fined 22 organizations for domain name use without 
MIC's permission (the domain names were reportedly similar or 
identical to registered domain names).  Fines totaled VND 230 
million (USD 14,375). 
 
Growing Costs of IPR Infringement 
--------------------------------- 
 
¶26. (U) Vietnam's average per capita GDP, while still relatively low 
(approximately 840 dollars in 2007 according to the General 
Statistics Office of Vietnam), continues to rise rapidly, 
particularly in the larger cities.  Vietnam's middle class is 
growing and a culture of consumerism is taking hold - increasing the 
losses to U.S. firms from piracy and counterfeiting.  Industry 
estimates show that the cost of pirated business software to U.S. 
firms in 2007 was more than USD 80 million, while pirated books cost 
U.S. companies an additional USD 17 million.  In addition, some 
items deemed "cultural products," (e.g., music, movies, books) are 
still subject to censorship and control regulations that impede 
access to this growing market. 
 
Public Awareness 
---------------- 
 
¶27. (U) Public and private awareness of the value of IPR protection 
is low but continues to grow.  Public television aired a number of 
IPR-related programs, including a game show on IP rights.  According 
to COV, Vietnamese media carried over 1,000 news articles on 
copyright in printed newspapers and a significantly higher number of 
 
HANOI 00000194  007.2 OF 008 
 
 
copyright related articles in online newspapers.  Vietnamese IPR 
agencies, the Vietnam Chamber of Commerce and Industry (VCCI) and 
other business associations organized workshops, panels and public 
forums to help increase awareness of IPR.  The COV website regularly 
updates information on copyright legislation and news, as well as 
provides a database on copyright registration.  The GVN also 
designated November 29 as "Anti-Counterfeit Day," and held IPR 
related activities in conjunction with the event. 
 
¶28. (U) With growing awareness of their rights, individuals and 
businesses are becoming increasingly active in self-protection.  COV 
issued 3,231 copyright certificates in 2006, a slight increase over 
2006.  NOIP received more than 3,080 applications for registration 
of inventions (28 percent higher than 2006), 1,908 applications for 
registration of industrial designs (19 percent higher than 2006), 
almost 32,000 applications for registration of trademarks (39 
percent higher than 2006), four applications for registration of 
geographical indications and one application for registration of 
layout designs of integrated circuits. 
 
¶29. (U) Copyright associations continue to expand their operations. 
The Vietnam Literature Copyright Centre (VLCC) increased its 
membership to more than 500, up from only 350 two years ago.  Total 
royalties of VLCC members in its first three years were VND 500 
million (USD 31,250).  The Vietnam Center for Protection of Music 
Copyright (VCPMC) has also grown; it now represents 1,200 members 
(up 20 percent from last year).  VCPMC members' total revenues 
reached VND 10 billion (USD 625,000) in 2007, up 233 percent from 
2006.  In 2004, the Record Industry Association of Vietnam was 
established and its membership has now grown to 45. 
 
Technical Assistance helps Build Enforcement Capacity 
--------------------------- ------------------------- 
 
¶30. (U) (U) In 2007, Vietnam continued to receive considerable 
IPR-related technical assistance from a number of NGOs and foreign 
donors, including multiple U.S. Government agencies such as USAID, 
Customs, the International Law Enforcement Academy (ILEA), the U.S. 
Patent and Trademark Office (USPTO) and the Department of Justice. 
This assistance included conferences, seminars, study tours and 
review of draft legislation.  For example, the USG funded a two-week 
study tour for 20 senior prosecutors, judges and IP officials to 
understand better how law enforcement agencies and the courts in the 
United States protect intellectual property. 
 
¶31. (U) Other examples of IPR technical assistance conducted in 2007 
include: 
 
-- COV worked with the Cable and Satellite Broadcasting Association 
of Asia (CASBAA) to organize a workshop on "Regularizing Vietnam's 
Pay TV Market" in Ho Chi Minh City.  The U.S. Embassy also 
participated in the seminar; 
-- Together with IFPI and STAR, COV held a workshop on "Optical disk 
regulation and enforcement"; 
-- NOIP worked with USPTO to organize a workshop on "Trademark and 
Domain Name Registration"; 
--NOIP held workshops on "The Role of Automation in Management and 
Service Provision in IPR Organizations" and "IP Strategy for 
Universities, Research and Development" with the assistance of WIPO; 
 
--Vietnam hosted an APEC Seminar on "IP in the Digital Era" and a 
seminar on well-known trademarks and brands with the assistance of 
the Government of Japan; 
-- NOIP reported also receiving other training from the United 
States, the EU, Switzerland, Japan and WIPO; 
-- The Supreme People's Court, in coordination with STAR, USPTO and 
DANIDA's Business Sector Programme Support (BSPS) hosted 2 training 
courses for 175 judges; 
-- Customs receiving training from organizations and governments 
from the United States, the EU, the UN, Japan, China, Belgium, 
France, the UK and Indonesia. 
 
Training needs 
--------------- 
 
¶32. (U) In 2008, the GVN will continue to require detailed legal 
consultations and technical assistance as it completes and "fine 
 
HANOI 00000194  008.2 OF 008 
 
 
tunes" its IPR legal framework.  Two specific areas for further 
engagement are with the Ministry of Justice as it begins revisions 
to the IP-related portions of the Criminal Code and working with COV 
as it works to draft an Optical Disk regulation.  Continued 
cooperation with the various enforcement agencies will be essential 
to raise awareness and build enforcement capacity as these 
organizations seek to take advantage of Vietnam's strengthened 
enforcement provisions.  English language abilities are an oft-cited 
concern among the IPR enforcement agencies, and in-country training 
activities conducted in Vietnamese, when possible, would greatly 
benefit these organizations. 
 
----------------------------- 
Conclusion and Recommendation 
----------------------------- 
 
¶33. (SBU) Vietnam will continue to grapple in the near future with 
the challenge of reducing the massive scale of IPR violations.  GVN 
authorities, including at the highest levels, have publicly 
demonstrated their understanding of the problem and expressed their 
resolve to protect and enforce IP rights.  With a strong legal 
foundation already in place, it will be important to work closely 
with the GVN on its Criminal Code revisions in 2008 to provide 
rights holders with the full cadre of remedies for IPR violations - 
administrative, civil and criminal.  The real challenge, however, 
lies in building the capacity and improving the efficacy of 
Vietnam's enforcement and judicial systems.  While training of 
judges and enforcement officials will be a longer-term fix, 
increasing fines to a level which would deter future violations and 
reversal of the GVN's decision no longer to empower NOIP, MOST and 
provincial DOSTs to provide technical advice to enforcement agencies 
could immediately and visibly reduce IPR violations. 
 
¶34. (SBU) Vietnam's BTA and WTO/TRIPS commitments provide us with 
strong tools for engaging the GVN on IPR enforcement, and the 
recently-signed Trade and Investment Framework Agreement (TIFA) 
provides a useful forum under which to do so.  Vietnam's expressed 
aspirations to be considered for the U.S. Generalized System of 
Preferences (GSP) program and its strong desire to continue as a 
popular destination for foreign direct investment will help 
strengthen our push for the GVN to fulfill its IPR-related BTA and 
WTO commitments. 
 
Recommendation 
-------------- 
 
¶35. (SBU) The Mission believes it is important to maintain 
consistent engagement with Vietnam to enhance the protection and 
enforcement of IPR.  Vietnam has shown a willingness to cooperate 
with the United States and other trading partners to address its 
serious problems with IP violations.  It must now take demonstrable 
and concrete steps to follow through on that commitment.  Given the 
great number of tools available, including the Special 301 process, 
continued pressure from the USG and industry members, and 
capacity-building and training, we expect that Vietnam should 
improve its ability to enforce IP rights.  For 2008, we recommend 
USTR maintain Vietnam on the Special 301 "Watch List." 
 
¶36.  (SBU) This message was coordinated with ConGen Ho Chi Minh 
City. 
 
MICHALAK

Here is another cable:


VZCZCXRO7452
RR RUEHHM
DE RUEHHM #0178/01 0571035
ZNR UUUUU ZZH
R 261035Z FEB 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 2151
INFO RUEHHI/AMEMBASSY HANOI 1543
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHBK/AMEMBASSY BANGKOK 0220
RUEHGV/USMISSION GENEVA 0027
RUEHHM/AMCONSUL HO CHI MINH CITY 2323

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000178 
 
SIPDIS 
 
USDOC 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EB/TPP/BTA/ANA 
STATE PASS USTR DAVID BISBEE 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO AND EMIKALIS 
TREASURY FOR OASIA 
GENEVA FOR USTR 
BANGKOK FOR USPTO JNESS 
 
E.O. 12958: N/A 
TAGS: ETRD [Foreign Trade], ECON [Economic Conditions], WTRO [World Trade Organization], KIPR [Intellectual Property Rights] VM [Vietnam] 
SUBJECT: USTR DISCUSSES WTO MEMBERSHIP, IT AND IPR WITH HCMC BUSINESS 
COMMUNITY 
 
REF: HANOI 233  B) HANOI 310 
 
¶1. (SBU) Summary: Area businesspeople discussed new trading 
rules and changes to Vietnam's legal framework as a result 
of its WTO membership with representatives of the Office of 
the U.S. Trade Representative (USTR) and the U.S. 
Department of Commerce, during a February 5-6 visit to Ho 
Chi Minh City.  The USG visitors provided American Chamber 
of Commerce members with an overview of the U.S. - Vietnam 
bilateral trade relations following Vietnam's accession to 
the World Trade Organization in January of this year, and 
the U.S. proposal to Vietnam to negotiate a Trade and 
Investment Framework Agreement.  USTR also explained many 
of the important commitments Vietnam has undertaken as part 
of its WTO accession agreement including comprehensive 
tariff reductions, significant service sector 
liberalization and adoption of WTO consistent rules in 
areas such as trading rights, IPR, and transparency.   In 
turn, AmCham members outlined their plans to form a WTO 
implementation committee to monitor implementation, and 
asked a broad range of questions relating to specific 
service sector commitments, trading rights, and customs 
duties.  In separate meetings representatives of U.S. 
information technology (IT) companies registered concern 
about new regulations that they believe could make it 
difficult for U.S. companies to qualify for Vietnamese 
government IT contracts.  Legal experts outlined challenges 
to adequately protecting intellectual property rights (IPR) 
under Vietnam's new IPR law. The visit followed meetings on 
February 1-2 in Hanoi and HCMC by Assistant United States 
Trade Representative Barbara Weisel. In those meetings USTR 
proposed to the GVN to move our bilateral relationship 
forward along the path set out under the Enterprise for 
ASEAN Initiative by negotiating a Trade and Investment 
Framework Agreement (TIFA) (ref A).   End summary. 
 
AMCHAM 
------ 
 
¶2. (SBU) David Bisbee, Director for Southeast Asia and 
Pacific Affairs for USTR, and Elena Mikalis, Director for 
ASEAN Affairs for the International Trade Administration at 
the Department of Commerce, visited HCMC February 5-6 to 
discuss Vietnam's WTO obligations and its legal reform 
efforts with members of the U.S. business community here. 
In a lengthy session with the American Chamber of Commerce, 
USTR fielded questions and provided additional details and 
clarifications on the terms and coverage of Vietnam's WTO 
accession package. AmCham members admitted that more study 
of the agreement was needed by members and that to better 
monitor and track implementation of the commitments by 
Vietnam, Amcham was considering forming a WTO 
Implementation Committee. Bisbee encouraged the formation 
of such a group and suggested that AmCham propose a formal 
dialogue with the Ministry of Trade as part of the process 
to facilitate a better understanding of the many legal and 
regulatory developments underway to meet WTO commitments. 
 
¶3. (SBU) The meeting also included lengthy discussions over 
trading rights and distribution services.  Members asked 
for clarification of Vietnam's commitments, which include 
the ability for all Vietnamese and foreign companies and 
individuals to directly import most goods into Vietnam as 
of January 1, 2007. Vietnam's commitments also provide for 
foreign individuals and enterprises without a physical 
presence in Vietnam to act as an importer of record, an 
important provision for many U.S. exporters.  Foreign firms 
can engage in distribution services of most goods without 
going through a Vietnamese intermediary in 2009. In the WTO 
accession agreement, Vietnam improved upon the timetable 
for granting trading rights established in the U.S.-Vietnam 
Bilateral Trade Agreement (BTA) to meet its GATT 
obligations, and reduced the range of products subject to 
transition periods. For distribution services, Vietnam also 
reduced the list of products excluded in Vietnam's WTO 
commitments compared to the BTA. 
 
IT 
-- 
 
HO CHI MIN 00000178  002 OF 002 
 
 
 
¶5. (SBU) Representatives of U.S. IT companies met with 
Bisbee and Mikalis to voice their concerns about an IT 
procurement policy announced by Vietnam in late July 2006 
(Decision 169).  USTR and Embassy Hanoi have worked closely 
with the Ministry of Post and Telecommunication (MPT) since 
July to raise USG and industry concerns about the policy, 
which seeks to provide procurement preferences for 
localized IT products and open source software.  MPT 
released a draft implementing circular on January 30 for 
industry comments, and USTR urged the IT industry members 
to raise their concerns directly with MPT.  In response to 
concerns raised by the USG in July, the MPT has worked to 
revise the original Decision to limit coverage to only 
government agencies and explicitly exclude state owned 
enterprises.  USTR and Hanoi Econoff explained to the 
industry representatives that MPT was open to hearing from 
industry about global procurement best practices, and 
industry was urged to engage the GVN directly on this 
issue. (Note: In meetings in Hanoi, USTR raised industry 
concerns with MPT directly. (Ref B) End note.) 
 
IPR 
--- 
 
¶6. (SBU) Bisbee and Mikalis also met with lawyers and HCMC 
government officials to discuss the implementation of 
Vietnam's new IPR law, which came into effect in 2006.  An 
attorney at a foreign law firm reported that in her opinion 
Vietnam's IPR enforcement activities had slowed as 
authorities familiarized themselves with the new law and 
its regulations.  The attorney and a representative from 
HCMC's Department of Science and Technology (DOST) observed 
that new rules meant to preserve the impartiality of IPR 
enforcement activities (by clearly separating registration 
and enforcement activities) have, in the short term, 
reduced the ability of experts at DOST and other agencies 
to assist enforcement authorities in pursuing IPR 
violations.  During a discussion on USTR's Special 301 
review of IP protection among major trading partners, DOST 
requested USTR's assistance in establishing a dialogue 
mechanism specific to HCMC's local efforts, similar to the 
301 review but on a semi-annual basis. DOST explained that 
provincial level implementation could be supported by 
regular dialogue with USTR and other USG agencies on the 
problems and bottlenecks experienced by the private sector. 
DOST also acknowledged the valuable technical assistance 
received from the U.S. Patent and Trademark Office (USPTO) 
and the USAID-funded Support for Trade Acceleration (STAR) 
program and reiterated the common request among Vietnam's 
IP agencies for increased levels of technical assistance. 
 
¶7. (SBU) The private sector attorney also explained her 
understanding that in order for IPR rights-holders to 
pursue those who sell counterfeit goods or goods that 
violate trademarks, rights-holders must first send "cease 
and desist letters" to violators.  While these letters are 
meant to be used as evidence that violations have taken 
place, they often tip off infringers, who are then able to 
evade prosecution. In subsequent meetings in Hanoi with IP 
authorities and advisors to the STAR program, it was 
clarified that the relevant decree requires 'cease and 
desist' letters only in cases of unfair competition, not in 
cases of clear trademark infringement. 
 
¶8. (U) Mr. Bisbee and Ms. Mikalis cleared this cable. 
WINNICK

These will be the last cables that we cover this year. We wish to thank James Love for organising some cables in Knowledge Ecology International.

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